Rental property Turnover Expenses

[Rob_Dog]

We had tenants move out and left us with about $6,000 in repairs. The repairs included missing furnishings, painting the entire interior and removing trash that was left within the property. The HVAC system was in disrepair along with the refrigerator.

How do I distinguish between normal maintenance and Turnover Expenses?

[PatriciaV]

Normal maintenance returns the property to its original condition, or to the state where the property can be rented again. Most expenses incurred between tenants fall into this category.

If you choose to upgrade furnishings or appliances during this time, you would report those as Improvements for depreciation. Note that you can expense certain improvements under the Safe Harbor Election. See this article for more information: What can I expense or depreciate with the business safe harbor election?

[Rob_Dog]

Thank you for the reply but it doesn't answer my question.

What expenses are put into "Turnover Expenses"

Thanks

[ThomasM125]

Turnover expenses is not a standard expense category on the rental schedule E. It would be better to put those expenses in either Repairs and/or Cleaning and Maintenance.  Repairs would be for expenses associated with fixing furniture and equipment, while cleaning and maintenance would be for things like trash removal and general cleaning activities. Painting would be considered a repair.

[Rob_Dog]

Thank you for the reply....

Looks like since we were not able to rent the property for 60 days due to the extent of the damage, we are able to deduct the electric bills, abnormal repairs and loss of rental income.

Does that make sense?

[DianeW777]

You can deduct the necessary expenses to keep the property active and make the necessary repairs during that time. As long as the property was available/advertised for rent during the time of repair period any expenses can be used.  

Loss of rental income is not a deduction. Since the rental income that was expected was never part of your taxable income, then there is no deduction allowed for that. However, the fact you can deduct all ordinary and necessary expenses to prepare it for the next tenant is still a win.

The options available for taking capital improvements as an expense as explained by @PatriciaA is always an option as well. The link is posted here for your convenience.

• What can I expense or depreciate with the business safe harbor election?

@Rob_Dog 

[Rob_Dog]

Would you happen to know why my Members did not transfer over from 2024?  I am having to re-add them (me and my wife) and then TT tells me that I had an ownership change and won't let me continue